It is a daily ritual for millions of Australians, but if you have noticed the price of your morning flat white or soy latte increase, brace yourself — it is likely to get worse.
By the end of the year,...
It is a daily ritual for millions of Australians, but if you have noticed the price of your morning flat white or soy latte increase, brace yourself — it is likely to get worse.
By the end of the year,...
The US Department of Labor has issued a new rule that raises standards for investment advice given to retirement savers. Financial professionals must now act as fiduciaries, prioritizing the interests of their clients over their own. This rule aims to protect against conflicts of interest that can lead to unsuitable recommendations, especially in areas like retirement rollovers and insurance products. By implementing this rule, the government hopes to safeguard the significant savings that retirement accounts represent for many Americans.
The number of Americans living past 100, or centenarians, is expected to quadruple by 2054. This poses a financial challenge as people now need to fund longer retirements. Experts recommend working past 65, saving as much and as early as possible, and exploring other income sources such as part-time work or annuities.
Many households often overlook key aspects of personal finance that can significantly impact their financial well-being. These include:
* Credit scores, which affect loan eligibility and interest rates
* Retirement savings, as people tend to underestimate their expenses in retirement
* Basic estate planning, such as wills and trusts, to protect assets and ensure care for loved ones
* Emergency savings, to cover unexpected expenses and avoid financial stress
* Tax withholding, to optimize tax payments and avoid penalties or large refunds
Many Americans, particularly lower earners, struggle with retirement planning. Only half of households have retirement accounts, with the median balance being around $87,000. Competing financial priorities, such as emergencies, college savings, and housing costs, make saving for retirement difficult. Additionally, high inflation and debt levels have further strained Americans' financial capacity.
Married couples where one spouse doesn't work can take advantage of spousal IRAs. These accounts allow the non-working spouse to contribute to an IRA based on their spouse's earned income. The contributions can reduce taxes for that year and help grow retirement savings. The deadline to contribute for 2023 is April 15th. Consider consulting a financial advisor to determine if a spousal IRA makes sense for you.
The shift from pensions to 401(k) plans has left individuals responsible for retirement savings. Research shows 77% of Americans believe this makes it harder to achieve financial security. Despite the desire for pensions, they may be risky and unlikely to return. Some support expanding Social Security or personal retirement accounts, while portable 401(k)s are seen as more suitable for the modern workforce.
Saving for retirement early is crucial due to compound interest, which allows earnings to grow exponentially over time. Young workers have an advantage as their savings have more time to compound. Research indicates that many adults lack retirement savings, urging action. Proposed government bills aim to promote early savings. Even without these measures, young individuals can utilize IRAs, especially Roth IRAs, which offer tax-free withdrawals. Starting early with even small contributions can secure a financially secure retirement by maximizing the power of time.
Both Democrats and Republicans have pledged to safeguard Social Security and Medicare amidst financial concerns. Democrats propose expanding benefits and increasing taxes for high-income earners, while Republicans favor a commission to examine government spending. Experts emphasize the need for action to secure the programs' viability for the millions who depend on them.
